Toronto-based First Cobalt said today it would become North America’s first producer of cobalt sulphate, which is crucial for EV batteries. By the end of next year, its Ontario refinery could produce enough cobalt for at least 335,000 electric vehicles by the end of next year.
The move comes as car companies are trying to reduce reliance on cobalt. Tesla and General Motors are both reportedly working to develop no-cobalt batteries. The establishment of a shorter cobalt supply chain in North America reveals that, despite these efforts, there will be an ongoing dependence on cobalt for EV batteries. Cobalt extends the life of lithium-ion batteries while minimizing the risk of overheating.
The feedstock for the First Cobalt refinery would be cobalt hydroxide produced by mining giant Glencore in the Democratic Republic of Congo (DRC). More than 60% of the world’s cobalt comes from the DRC, which is one of the globe’s poorest countries. The use of child labor for cobalt-mining in the Democratic Republic of Congo is a major ethical concern.
But cost, rather than ethics, could be the major driver for changing the cobalt supply chain. Battery specialists from BMW estimate that 80% of the total battery pack cost comes from the materials used for the cells, and only 20% comes from the manufacturing process, and everything else needed to make them.
First Cobalt said that its Ontario-based refinery could produce 1,000 tonnes of cobalt (or 5,000 tonnes of cobalt sulphate). A tonne is equal to 1,000 kilograms. A year later, by the end of 2021, the refinery could produce as much as 5,000 tonnes of cobalt (or 25,000 tonnes of cobalt sulphate), which Reuters says would be “a significant proportion of the global refined cobalt market.”
Depending on the chemistry recipe used for an EV battery, that output would be enough 335,000 electric vehicles using a relatively high mix of cobalt – or 700,000 electric cars for lower reliance on cobalt. That’s according to Benchmark Mineral Intelligence.
The initial capital needed by First Cobalt to launch the project, an expansion of its current facility, is estimated at $56 million.
Trent Mell, First Cobalt chief executive, said:
The outlook for electric vehicles and the push by automakers to develop shorter supply chains creates an excellent opportunity. With most of the world’s cobalt refining capacity located in China, there is strong demand for a North American alternative. Our focus will now turn to working with Glencore, our strategic partner, on implementing a new, ethical and transparent supply chain.
Nico Paraskevas, Glencore’s head of copper and cobalt marketing added:
As the world transitions to a low-carbon economy, cobalt will play an essential role in the growth of mobility electrification. We look forward to working with First Cobalt to bring a sustainable source of cobalt to the North American market.
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